PVR, INOX to register increase in September quarter revenue due to box office hits

Net profits of these multiplexes are expected to grow at least in the range of 50-80 per cent for the September quarter on a year-on-year basis.Rajesh Naidu&Jwalit Vyas | ET Bureau | October 23, 2015, 07:51 IST

According to various trade estimates, the box office collections of these have exceeded Rs 1,100 crore against Rs 865 crore in the June 2015 quarter, which, too, was a good quarter for the two multiplex players. PVR's consolidated sales grew 34 per cent year-on-year to Rs 486 crore in the June quarter. For INOX, standalone sales rose by a similar rate to Rs 311.4 crore. Each of the companies had reported over 34 per cent jump in sales during the June quarter. PVR's net profit grew seven-fold to Rs 58.5 crore whereas for INOX, it went up four times to Rs 22.6 crore.

The occupancy rate of these players is expected to be in the range of 35-40 per cent in the September 2015 quarter. A major chunk of the incremental revenue from higher occupancy flows directly to the operating profit as fixed costs stay the same. This improves operating leverage. Incremental occupancy also improves food and beverages business which is more profitable for these multiplexes.

This is expected to support operating margins of these companies, which had reported a better profitability in the June 2015 quarter. INOX operated at 12.9 per cent operating margin after depreciation while PVR reported a margin of 17.1 per cent in the June quarter.

Net profits of these multiplexes are expected to grow at least in the range of 50-80 per cent for the September quarter on a year-on-year basis. Besides this, these multiplexes have increased their average ticket prices by at least 5 per cent in the September quarter from the year ago.

As a result of these factors and considering the rising preference for multiplexes to view movies rich in content, it is estimated they would generate 35-40 per cent growth in their revenues in the September 2015 quarter in comparison with the same quarter last year.

In the past three months, the stocks of PVR and INOX Leisure have given 4.5 per cent and 19 per cent returns, respectively. While INOX results will be announced on Thursday, PVR results will be out on November 3.